Allstate Insurance Company v. Harry Booth, et al.
Published: Aug. 12, 2000 | Result Date: Apr. 13, 2000 | Filing Date: Jan. 1, 1900 |Case number: SACV98503 Verdict – $3,000,000
Judge
Court
USDC Central
Attorneys
Plaintiff
James E. Fitzgerald
(Drinker, Biddle & Reath)
Defendant
Stephen M. Garcia
(Garcia & Artigliere)
Experts
Plaintiff
Albert Paxton
(technical)
Hannes H. Richter
(technical)
Facts
According to the plaintiffs: The defendants defrauded Allstate with claims arising from the 1994, Northridge
earthquake. Based on homeownersÆ claims, the defendants billed and collected for work that was not necessary
or never performed. The case involved ten specific claims by Allstate insureds for damages to the insuredsÆ
homes caused by the earthquake.
Defendant Booth was an independent insurance adjuster assigned to adjust claims caused by the 1994
earthquake. He solicited the principals at Western States Companies (defendants Don Ames) and Tom Conrad
to inflate the scope of damage to properties. The reports were then used as the basis for the defendant
contractors Dunn-Rite Construction (Laporte is the principal) and William Moretti to prepare inflated invoices
for work that was not necessary or never performed. Booth then submitted the reports and invoices to Allstate
and recommended payment.
In reliance on the reports and invoices, Allstate paid out hundreds of thousands of dollars
for work billed but never performed. The difference between the cost of the work, if done, and
the amount paid out by Allstate was divided between and among the defendants, with Booth
receiving a kickback for his facilitation of the fraud.
Result
The jury ultimately returned 32 special verdicts finding the remaining three defendants had defrauded Allstate on the ten specific claims. The jury awarded Allstate approximately $1.5 million in compensatory damages and the same amount in exemplary damages for a total award in excess of $3,000,000. Defendant Booth was found liable to Allstate for $529,166 in compensatory damages and $529,166 in exemplary damages. Defendant Ames was found liable to Allstate for $529,166 in compensatory damages and $529,166 in exemplary damages. Defendant Laporte was found liable to Allstate for $450,000 in compensatory damages and $450,000 in exemplary damages.
Other Information
Prior to trial, Conrad and Moretti entered into a stipulated judgment approved by the court. They admitted to a conspiracy among themselves, Booth, Ames and Laporte and agreed to make restitution of $400,000. At trial the three defendants refused to testify and invoked the Fifth Amendment privilege (jury was not present) against self-incrimination claiming a threat of criminal prosecution.
Deliberation
eight hours
Length
15 days
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